Bitcoin Price Looks Poised for Pullback But June Could Revive Rally

The pullback could be short-lived, as BTC tends to perform well in June, and the long-term bull case is still intact.

The case for BTC extending its four-month winning streak in June would weaken if the price finds acceptance below the 30-day MA. Bitcoin is teasing short-term bearish reversal at the onset of the historically good month of June.

The sudden $1,100 pullback from one-year highs ended up engulfing the price action seen in the previous three trading days - a sign of buyer exhaustion.

Further, prices closed below the key support of $8,390, invalidating the bullish higher high established above that level on May 26.

The price pullback looks to have legs, as trading volumes on Bitstamp doubled on Thursday as prices dropped.

Prices fell 14.77 percent last year, snapping the three-year June winning run.

The 27.85 percent price rise seen in 2012 is bitcoin's best June performance to date.

With the relative strength index reporting bearish divergence - lower highs as opposed to higher highs on price - and volumes rising sharply, a break below $8,000 looks likely.

While the odds are stacked in favor of a deeper correction, the cryptocurrency could still manage to eke out gains in June for the fifth straight month if the 30-day MA reverses the pullback.

The cryptocurrency has charted higher lows along the 30-day MA throughout the rally from $3,500 to $9,000.